Fairfax will acquire 60% of IDBI Bank at ₹81 per share, valuing the deal at ₹52,878 crore. The Cabinet Committee on Economic Affairs approved the transaction on October 14, sealing a long‑running privatisation process.
The bid price sits below the bank’s closing price and the initial reserve of ₹94 per share. Amit Tandon of IiAS points to a valuation report that pegged fair value at around ₹76, suggesting the offer price reflects asset quality uncertainty.
Fairfax’s voting rights are capped at 26%, a stark contrast to its 60% economic ownership. The government will keep 15% and LIC 19%, together holding 34% and retaining the power to block special resolutions if they collectively exceed 25%.
JN Gupta of SEBI draws a parallel with RBL Bank, where the RBI allowed a foreign stakeholder to hold over 70%. He questions why IDBI Bank is restricted to 60% when domestic promoters were historically forced to reduce holdings below 15%.
Tandon says the government is unlikely to be called upon for further capital at this stage, though the bank’s performance under Fairfax’s stewardship must be monitored.
The restructuring roadmap also includes a planned merger of CSB Bank, where Fairfax owns about 40%, with IDBI Bank within two years—a move that still lacks clarity on execution timeline and market impact.